- FTSE 100 opens lower as Chinese GDP comes in lower than expected
- Netflix subscribers reach record level ahead of results this week
- US futures lose steam ahead of key earnings
- Brent crude slips to $78 a barrel on weaker China data
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown:
“The FTSE 100 has relinquished some of the gains it accumulated last week on weaker-than-expected Chinese economic data. China’s GDP rose 6.3%, which was higher than last quarter but some way below expectations. The sheer scale of China’s economy means a perceived stalling in the post-pandemic recovery has ramifications for global demand and economies. There’s also little news to distract the market from looming UK inflation data later this week, with the UK poised to assess the latest reading and what this will mean for the interest rate trajectory.
Over in the US, media giant Netflix has something to celebrate, with a record number of people paying to use the streaming service, analysts predict. About 1.8m subscribers are expected to have been added in the last quarter, which would be taken as a serious accolade if the numbers ring true in this week’s results. The increase comes as Netflix has taken a heavy-handed approach to password and account sharing, and there had been questions about how many account-sharers would translate into bonified new subscribers given the extensive demands on people’s wallets. Putting these fears to bed is the result of an excellent original-content slate, which is the main weapon at Netflix’s disposal in the highly competitive streaming arena.
One set of good news isn’t quite enough to give the US market an overall boost though, with futures contracts tied to the three major indexes shedding about 0.2%. The flatlining comes after strong gains last week, and reflects the uncertainty that comes from upcoming earnings. While the positivity that came from a better-than-forecast inflation reading last week, the market has now moved on to the next hurdle, which is a slew of upcoming data from big names, including big tech. Commentary from these firms will highlight the state of the US and global consumer and set the tone for the new quarter, with nerves increasing about what the second half of the year will hold.
Brent crude is down to around $79 a barrel, as the weaker Chinese data raises questions about the demand profile. At the same time, a previous production block in Libya has been resolved, adding extra supply into the equation. The overall effect of recent moves is relatively muted, but the situation in China is the element that needs to be watched closely – any further shocks, especially around stimulus, will have immediate knock-on effects for the oil price.”
